Hongsa Power Plant 100% completed, Xayaboury Hydropower 70% Completed








Lao stock market seeks hydropower spark


2014-09-07

Lao Securities Exchange (LSX)

expects to list more than 23

firms by 2020, according to the

exchange’s top official.

LSX Chairman and

Chief Executive Officer Mr

Dethphouvang Moularat said,

as quoted in Thai Newspaper

Bangkok Post last week, the

stock market would approach

companies which invest in

hydropower plants in Laos to

list on the stock market so these

firms can access long term

investment capital.

Since its debut in 2011, three

companies: EDL Generation,

Banque Pour Le Commerce

Exterieur Lao and Lao World

have listed on the LSX.

Laos has potential to build

more than 100 hydropower

plants in the country thanks

to its abundance of rivers and

mountainous terrain suitable for

dam construction. At present,

a number of companies from

Thailand, Vietnam, China and

Russia have shown interest in

the mega investment projects.

The Lao government has

a policy to turn the landlocked

country into a major supplier

of electricity in the region. At

present, there are more than 20

power plants with combined

electricity generating capacity

of 3,000 MW operating in Laos.

Most of the power is exported to

the neighbouring countries of

Thailand and Vietnam.

Observers have noted that

the Lao government holds shares

in major power companies such

as Nam Theun 2 and Hongsa

power plants; therefore it is

possible for it to sell some of

its shares to local and foreign

investors to free up cash to spend

on more important state projects.

Over the past few years,

the Lao government has been

increasing efforts to encourage

local firms to list on the local

stock market as part of efforts

to help them gain access to

investment funds. However,

one of the major challenges

the Lao firms face is their need

to improve management and

reporting practices to meet stock

market requirements.

A number of local companies

including a cement producer in

Khammuan province are hiring

international consulting firms

to provide them with advice on

how to improve their operations

in preparation to meet the stock

exchange’s requirements.

Local business people told

Vientiane Times that they are

giving serious consideration

to the Lao stock market’s new

investment opportunities.

However, they said they

were cautious about putting

their money in as they have

no experience in this form of

investment.

At present, most of the

investors who are active in

the market are from Thailand,

Japan and China. More foreign

investors have been active

since the market introduced an

online trading system last year,

allowing investors to purchase

and sell shares via the internet.

Investor activity in the

market is expected to increase if

the number of listed companies

increases as it will give them

more investment choices.

Shares of BCEL and EDL

Gen on the stock market are

actively traded while shares

of Lao World have remained

inactive over the past several

months.